Tag Archive | "Michael Keppler"

Cotacachi Mayor’s House


Recent messages looked at how Merri and I search for Cotacachi real estate.

The road paving we have been tracking is now done.

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In two directions…

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in less than two weeks.

We keep our eyes open every day and the search pays off.

Today, near Primavera II condos…

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Around the corner from Cotacachi’s Mayor’s house (which is for sale) …

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we spotted two old houses for sale.  This one is $25,000.

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and this, $36,000.

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These fixer uppers have huge lots, in the center of the village. They may be real sleepers.  We’ll see as we’ll inspect them on our Imbaburra real estate tour that begins tomorrow.

You can gain Cotacachi real estate information and Ecuador real estate contacts as an Ecuador Living subscriber. See details here.

Speaking of sleepers, this excerpt from today’s password protected multi currency course shows why European shares may be sleepers as well.

Here is the excerpt:

This multi currency update has three portions. First we see anther inflation indicator. Second we update our search for value. Third we end with some answers to questions from lesson one of our new updated primer course.

Recent inflationary events include the support by US authorities of Bank of America with a guarantee of liquidity and capital. B of A faces losses of up to $118 billion dollars.

The government gets shares in the bank worth $20 billion.  In other words the government stumps up about $88 billion (that it does not have).  This is inflation.

Citibank in trouble as well.

Jyske Global Asset Management wrote in its last market update three days ago:

Fears of further credit losses and rumours of another large US bank being nationalized dragged the international stock market down this week. The New Year rally last week is already forgotten, and investors are anticipating new lows in 2009.

Citigroup Inc. posted an $8.29 billion loss, only a few days after the announcement of their plans to sell the control of Smith Barney to rival Morgan Stanley.

Sales at U.S. retailers dropped in December for the sixth consecutive month (first time since 1992) and the most in three years.

S&P cut Greece’s long-term credit rating to A- with a stable outlook, due to its public and private debt and the budget deficit. The downgrade makes Greece the lowest rated country in the Euro zone.

Market participators are now speculating whether a Euro exit may become an option for some members of the Euro-bloc, analysts view Greece as the weakest economy within the Euro zone.

The European Central Bank (ECB) Thursday cut the Euro zone interest rate to the lowest level in more than 3 years.

As expected the main policy rate was cut by a half percentage point to 2%. The Danish Central bank followed the ECB with an even bigger cut of 75 basis pts to 3%.

#1: Falling interest rates are indicators for increased activity in share markets.

#2: Combine this with the fact that stock funds saw huge redemptions in 2008.

#3: Add in the next fact that international equity funds were among the most redeemed losing about a fourth of their total assets in 2008.

U.S. stock funds only had redemptions of about 10% of their assets.  Bond funds on the other hand experienced positive flows in 2008.

This increases my enthusiasm for international shares…especially in Europe.

Low interest rates plus markets that are oversold plus inflation all bode well for shares.

There are four ways to fight inflation; real estate, your own business, commodities and equities.   So depressed international equities in an atmosphere of low interest rates spells opportunity.

These three factors are the elements that create value because value investors are generally bucking the trend.

This is why last year my biggest equity position was in the Jyske Invest European Equity fund.  I picked a fund that was invested mostly in markets that Michael Keppler of Keppler Asset Mangement viewed as having the best value.

Keppler has changed some of his rankings this month so let’s review the change and see if my position still makes sense.

Let’s look at the geographical breakdown of the Jyske Invest European Equities fund I hold now.

This fund has departed quite a lot from the synchronicity it enjoyed with Keppler’s top values when I invested two years ago.  The fund’s portfolio is spread here now:

UK  24%
Germany 16%
Switzerland 13%
France 12%
Spain 7%
Netherlands 4.5%
Sweden 4%
Spain 4%
Finland 3%
Italy      2%
Greece 2%
Denmark 1.5%
Norway 1.5%
Luxembourg .5%
Ireland  0.5%
Austria 0.5%

The fund’s managers report says:

There are prospects of uncertainty in 2009. The world economy is struggling
and the optimism has turned into pessimism. Central banks and  governments have been busy introducing rescue packages and  interest-rate cuts. The help has been offered, but is it sufficient and when will it begin to show an effect? We
expect that 2009 will bring wide swings in the equity market. A lasting upturn is not likely to be just around  the corner. We are still looking at a longer period characterised by uncertainty before the optimists outnumber the pessimists.

For the fund we prefer cheap shares with prospects of earnings growth. That type of shares has historically yielded the best returns.

Though this fund no longer has the same value synchronicity with Keppler that it previously had, I’ll continue to hold this as I plan to increase my equity position. I can balance this fund’s holdings to better match Keppler’s rankings by adding Hong Kong, Singapore, Italian and other funds or ETFs.

You can learn more about Keppler’s market updates and the ETFs we use in our multi currency portfolio as a multi currency susbcriber.

Until next update, good global investing

Gary

Join Merri, me and Peter Laub of Jyske Global Asset Management at OUR INTERNATIONAL INVESTING & BUSINESS COURSE IN ECUADOR. We review economic conditions, Ecuador real estate, my entire portfolio plus investing and business ideas for the months ahead.

Gary

Your own business is a  good way to secure purchasing power. This is why Merri, our webmaster and I decided to create a new course on how to build a web business with a webmaster.  There is a special offer on this new course that expired to the general public last Tuesday…but is still available to you.  See the offer here.

Get this course FREE if you join us in Ecuador this February.

Feb 9-11 Beyond Logic Keys to More Wealth & Better Health

Feb. 13-15 International Business & Investing Made EZ

Feb. 16-17 Imbabura Real Estate Tour

Attend any two Ecuador courses or tours in a calendar month…$949 for one.  $1,349 for two

Attend any three Ecuador courses or tours in a calendar month…$1,199 for one.  $1,799 for two

Or join Merri, me and Thomas Fischer of Jyske Global Asset Management, July 24-26, 2009 in North Carolina for International Investing and Business Made EZ

Multi Currency Strategy Emerging


Multi currency strategy emerging markets are worth review now. Recent multi currency messages entitled Multi Currency USA and Multi Currency Global looked at the importance of multi currency investments in Europe, Japan and the US.

We continue the multi currency review in this message looking at Jyske Bank’s multi currency strategic review of the biggest emerging market, China. Jyske says:

Seen in the light of a major slowdown in economic growth, Chinese exports will come under heavy fire in the coming months. Given a weaker export sector, and presumably also weaker investments in the private sector as well as slower activity in domestic property-related activities, we anticipate a moderate slowdown in economic growth. By Chinese standards, moderate still means economic growth above 8%, and for the rest of the year, the growth rate will presumably be around 9%, i.e. a growth rate just below 10% for 2008.

International investors have been concerned that the Chinese government would react too slowly to growth risks and that this would send up the risk of a serious setback (i.e. GDP growth rates much lower than 8%). Such fear seems to be out of place, based on the demand figures for July. Foreign trade, retail trade and fixed investments beat expectations although industrial activity is gearing down marginally.

The Chinese authorities have traditionally introduced macro-economic policies supporting economic growth, including an expansionary fiscal policy, monetary-policy easing etc. to avoid a hard landing. We also expect that this will happen this time if growth seems to be too slow. The authorities have recently raised the tax benefit on exports and eased up the tight management of corporate loans in the financial sector.

On the domestic front, the trend in consumer demand is still impressive: July’s 23.3% growth in retail sales was higher than expected. This happened although consumers are squeezed by higher food prices, the solid correction in the Chinese equity market and a slowdown in the real-estate market (although the impact from the two last-mentioned factors was reflected in lower sales figures for cars, furniture and building materials).

With prospects of a moderate slowdown in industrial activity in the coming quarters, the growth in Chinese demand for many important commodities will presumably slow down. Recent data indicate that this trend has already set in: for instance crude-oil imports dropped back by 2.1% m/m in July and by 8.7% in June whereas iron ore imports dropped by 4.2% and 3.5% in these two months.

This suggests that investors are more worried about China than they should be. Chinese growth looks dimmed, but by most financial measures even this dimmer light is bright compared to economics in most countries. The fundamental economic fact is that China is the most populated nation on earth racing into middle class capitalism.

Equity investors may have over reacted and oversold the Chinese market.

In August, the LA Times wrote:

SHANGHAI — Many Chinese investors had hoped the Olympics would give a boost to their nation’s sagging stock market. So far, just the opposite has happened. The benchmark Shanghai composite index tumbled 5.3% on Monday, falling for the sixth time in seven trading sessions. The index has plunged 15% since the Beijing Games opened Aug. 8, and it now stands at 2,320 — down 56% since the start of the year, making it one of the worst performers in the world.

Since then the market has not rallied.

The Guardian wrote yesterday (Sept. 8, 2008): The main Shanghai index <.SSEC> shed 2 percent on Monday, touching a fresh 20-month low, despite a rally elsewhere in Asia triggered by the takeover of the two firms.

The U.S. Treasury’s takeover of Fannie Mae and Freddie Mac is good news in the short term for China, the biggest holder of the giant mortgage lenders’ debt, but Beijing’s huge U.S. exposure still poses a serious risk, a prominent government researcher said on Monday.

The Shanghai stock market is down 67% in less than a year. Yet as Jyske noted above, foreign trade, retail trade and fixed investments are beating expectations.

This is the type of multi currency distortion we look for as value investors.

This does not mean we should jump headlong into Chinese shares.

China according to the analysis of Michael Keppler remains one of the low value markets. Keppler’s sell candidates are China , Egypt , India , Indonesia, Jordan, Morocco.

Market timing rarely works. Value investing is far more effective and based on value alone, it apears to be too soon to jump in the Chinese market in a broad way.

However we can start reviewing Chinese opportunities looking for specific values.

One share to check is Hyflux Water. Hyflux is a Singapote company that provides water services in China. Keppler ranks Singapore as a low value major market along with Austria , Canada, Denmark, Hong Kong, Singapore, Switzerland and the U.S.A, but Hyflux may offer good value now.

I first wrote about Hyflux in 2004.

We invested $51,000 in our Model Green Portfolio last November. This investment has dropped to $40,193.

We are reviewing Hyflux now in our Multi Currency Portfolio Course.

Gary

Join me and Thomas Fischer from Jyske Global Asset Management in North Carolina to learn more about economic trends.

International Investing and Business Made EZ North Carolina

We’ll have lunch at the farm and enjoy the leaf change.

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Thomas Fisher speaking to our  delegates at the farm.

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Delegates enjoying a private conversation with Thomas Fischer during a coffee break at the farm.

This is the most beautiful time of the year on the Blue Ridge.

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